Library: Policy

OKDHS:10-1-5. Real property other than home property

Issued 4-1-98

(a)

Scope and applicability

. Real property other than home property is defined as real estate which is not maintained for home residence, mineral rights, life estates or any other client-owned property which is not personal property. Real property owned by an applicant or recipient is considered exempt as a resource for up to six (6) calendar months only if a good faith effort to sell is being made and Form C-6 (new Form 08TA016E), Agreement to Repay, is signed by the client. A good faith effort is defined as any recognized listing, posting or advertising for sale at a reasonable, marketable price appropriate to comparable property values and a reasonable offer has not been refused. Once a resource has been exempted based on good faith effort, further exemption is not allowed.

(1) The exemption period is terminated when the property is sold, at the end of six months, or at any point in the six-month period when it is determined that a good faith effort to sell is not being made. At the end of the six-month exemption period, either the net proceeds from the sale of the property or the equity value of the property is considered as a resource.
(2) If the exemption period ends because the property is sold, an overpayment referral for the AFDC benefits received during the period is submitted with Form C-6 (new Form 08TA016E), Repayment Agreement, and the client's plans to repay from the sale proceeds. If the exemption period ends and the property has not been sold, an overpayment referral cannot be submitted until the property is sold, as long as the client continues to make a good faith effort to sell the property. The overpayment referral is submitted after the property has been sold or at the point the client discontinues to make a good faith effort to sell the property.
(3) The client's statement regarding ownership of real property is sufficient proof of ownership unless there is information suggesting ownership of property' not reported. The market value of real estate other than the home owned by the applicant is established on the basis of oral or written information which the applicant has at hand and counsel with persons who have specialized knowledge about this kind of resource. The client's equity is determined by deducting encumbrances, including the cost to the client of obtaining a merchantable title.
(4) At the time of each periodic redetermination of eligibility, the case worker records relevant known facts regarding the current market value of real estate in the community where the recipient's property is located and the recipient's oral statements regarding the current value of the real estate. If there is agreement that the value has not changed, the last established market value constitutes the current value. When the worker's evaluation indicates the value has changed, the value is redetermined according to policy related to the determination of the value of real estate owned by the applicant.

(b) Mineral rights. Mineral rights not associated with the home property are considered a resource. Since evaluation and salability of mineral rights fluctuate, the establishment of the value of mineral rights should, in general, be based on actual offers of purchase rather than on the opinion of collateral sources alone. The feasibility of listing for sale should be considered. The value of mineral rights on the total home property is considered along with surface rights in evaluating that property.

(c) Land held by a member of an Indian tribe. Land which is held by an enrolled member of an Indian tribe is excluded from resources if it cannot be sold or transferred without the permission of other individuals, the tribe, or a Federal agency. If permission is needed, the land is excluded as a resource.

(d) Life estates and homestead rights.

(1) Life estates. A life estate conveys upon an individual or individuals for his or her lifetime, certain rights in property. Its duration is measured by the lifetime of the tenant or of another person, or by the occurrence of some specific event, such as remarriage of the tenant. The owner of a life estate has the right of possession, the right to use the property, the right to obtain profits from the property and the right to sell his or her life estate interest. However, the contract establishing the life estate may restrain one or more rights of the individual. The individual does not have title to the property nor the right to sell the property. He or she may not usually pass it on to his heirs in the form of an inheritance. When a life estate in property is not used as the client's home, it is necessary to establish the value. A computer procedure is available to compute the value of a life estate by input of the current market value of the property and the age of the life estate owner.
(2) Homestead rights. Homestead rights held by a client in real estate provides shelter (or shelter and income) so long as he or she resides on the property. If the individual moves from the property (abandons homestead rights), the property becomes subject to administration. Since a homestead right cannot be sold, it would have no value.